Guest post: Poll on Jamie Dimon and follow up
by Kenneth Thomas
The poll results are in on whether Jamie Dimon will resign from the board of the New York Federal Reserve Bank. By a 53%-40% majority, with 7% unsure, readers thought that Dimon would not step down in the wake of the huge supervision failure at JP Morgan, which led to its $3 billion and counting loss.
Meanwhile, the pressure is building for him to resign. Simon Johnson, whose article I first cited on this issue, has written new articles calling for an investigation into JP Morgan, calling for Dimon’s resignation, and taking on arguments defending Dimon. Johnson has also started an online petition calling for Dimon’s resignation or ouster.
Johnson is hardly alone, however. In recent days, others who have called for Dimon’s resignation include former Wall Street prosecutor and New York Governor Eliot Spitzer, Nobel Prize-winning economist Paul Krugman, Massachusetts Senatorial candidate Elizabeth Warren, and today, Kansas City Fed President Esther George said that Fed directors who don’t meet high standards should resign, which Johnson tweeted was “huge.”
I was one who voted “no” on the poll, but the recent activity makes me think the odds must be increasing. And yes, I signed Johnson’s petition.
crossposted with Middle Class Political Economist
Has anyone looked closely at the focus of business activities of JP Morgan Chase Bank recently? Keeping in mind that the two halves of that combination are banks that had the business purpose of lending money. JP Morgan lent to corporations and Chase lent to individuals and smaller businesses. That was before they combined. I ask because I have noticed recently that in their auto finance branch they seem not to be very competitive. Their rates are often 1.5% to 2.0% higher than other similar banks. An analyst recently told me that they were not being aggressive on “big ticket” loans. They were, say five or six years ago, the bank to turn to in the NE for a big car loan at a competitive rate. Other banks watched the Chase rate sheet to stay competitive. That’s not the story now. What does JP Morgan Chase Bank do if not lend money at the retail level?
Why is the CEO of J P Morgan Chase on the board of a Federal Reserve Bank in the first place? Excluding him should have been a no-brainer.
Some perspective:
1) JPMorgan Chase market value of equity = $150 Billion, so loss is equal to about 2% of net worth.
2) Chase made $5.2B in previous quarter, $19B for 20011. Expects to be profitable for quarter despite the loss.
Loss will redouble efforts for risk control at Chase, as well as other banks. Loss did not in any way endanger Chase or banking system. Loss is being exaggerated and hyped by those who want more control (read “more money “) from banking system.
I feel that the loss of the hedge funds for J. P. Morgan are stated 90% lower than the real loss. We will never hear the real truth unless it comes out from the traders.
Just saw a Chase TV commercial showing their support and effort for Obamas 100,000 jobs for veterans program. This brownnosing should help.